The Sri Lankan rupee closed slightly weaker on Monday, as dollar demand from importers rose, but a bout of greenback sales by banks late in the day capped its fall, dealers said. Exporters have been reluctant to sell dollars as they expect the rupee to depreciate further, they said. The rupee, which touched a low of 143.30 per dollar intraday, closed at 143.25/35 per dollar compared with Friday's close of 143.23/27. It hit a record low of 143.30 on November 27.
"The importer demand was there, the trades are dull, but there are not much inflows," said a currency dealer, asking not to be named. Dealers said inward remittances for the festival season starting mid-December would ease some pressure off the local currency in the short term. Prime Minister Ranil Wickremesinghe last week warned of pressure on the currency due to a China-led global slowdown and a possible Federal Reserve rate hike.
Sri Lanka is expected to seek an IMF stand-by arrangement to fend off a risk that its economy will be hurt next year by repercussions from events affecting major economies. Sri Lanka has not made a formal request for International Monetary Fund help but the fund's staff are looking at ways to help the island nation, an IMF spokesman said last Thursday. IMF said it had concerns with the country's proposed 2016 budget, which does not envisage significant consolidation relative to the expected out-turn for 2015. Commercial banks parked 110.195 billion rupees ($769.79 million) of surplus liquidity on Monday, using the central bank's deposit facility at 6 percent, official data showed.
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